Updated: UK Budget tax fears hit Statoil / News / The Foreigner

Updated: UK Budget tax fears hit Statoil. Norway’s Statoil has halted work on two North Sea oil and gas projects following windfall tax warnings by UK Chancellor of the Exchequer George Osborne. As part of efforts to help the UK’s ailing economy, Minister Osborne plans to recover two billion pounds a year from oil companies for five years, despite threats this could lead to abandoning developments in the North Sea. Statoil tells The Foreigner in an email it has now decided to “pause and reflect” about its Mariner and Bressay projects south-east of the Shetlands, worth more than six billion pounds, arguing “the proposed tax changes impact project economics significantly and represent a substantial set back.”

statoil, marinerfield, bressayfield, georgeosborne, ukbudget, woodmackenzie



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Updated: UK Budget tax fears hit Statoil

Published on Wednesday, 30th March, 2011 at 09:57 under the news category, by Michael Sandelson   .
Last Updated on 31st March 2011 at 12:10.

Norway’s Statoil has halted work on two North Sea oil and gas projects following windfall tax warnings by UK Chancellor of the Exchequer George Osborne.

New Identity, Statoil
New Identity, Statoil
Photo: Øyvind Hagen/Statoil


As part of efforts to help the UK’s ailing economy, Minister Osborne plans to recover two billion pounds a year from oil companies for five years, despite threats this could lead to abandoning developments in the North Sea.

Statoil tells The Foreigner in an email it has now decided to “pause and reflect” about its Mariner and Bressay projects south-east of the Shetlands, worth more than six billion pounds, arguing “the proposed tax changes impact project economics significantly and represent a substantial set back.”

Industry experts fear the move, designed to finance a 1p per litre cut in fuel duty instead of Labour’s previously planned 4p per litre rise, could put thousands of Scottish jobs at risk, and mean Statoil abandons plans to set up a base in Aberdeen.

Research and Consulting Company Wood Mackenzie estimates both Mariner and Bressay combined contain 640 million barrels of recoverable oil.

Statoil had planned to use over 60 billion kroner in developing these fields, with considerable regional and national benefits, but now says “the proposed tax changes impact project economics significantly and represent a substantial setback.“

Nevertheless, Minister Osborne remains adamant, telling Commons MPs last night current oil prices mean investing in exploitation of these resources remains profitable.

In reply to a question about Statoil’s threat and today’s planned emergency talks with The Treasury, the Chancellor claimed, “they just want to talk to us about their investment plans. They are a Norwegian oil company and they have the vast majority of their oil production in Norway. The current rate, with my increase, for the UK is going to be 62 per cent. In Norway, it is currently a 78 per cent tax rate. So they are certainly used to dealing in high-tax regimes,” reports The Daily Mail.



Published on Wednesday, 30th March, 2011 at 09:57 under the news category, by Michael Sandelson   .
Last updated on 31st March 2011 at 12:10.

This post has the following tags: statoil, marinerfield, bressayfield, georgeosborne, ukbudget, woodmackenzie.





  
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